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Transcript of VIRTUAL CURRENCY & CYBERSECURITYcab-inc.com/wp-content/uploads/2019/06/Gov...Payments and Transfers:...
Eastern Caribbean Central BankEastern Caribbean Central Bank
Transforming The ECCU Together6/14/2019
VIRTUAL CURRENCY & CYBERSECURITY:
STRIKING A BALANCE BETWEEN BOUNDARIES & SECURITY
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Timothy Antoine
Governor, ECCB
Eastern Caribbean Central Bank
“Virtual currencies, perhaps mostnotably bitcoin have captured theimagination of some, struck fearamong others, and confused theheck out of the rest of us”
- Thomas Carper, US senator
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Eastern Caribbean Central Bank
Virtual currencies are digitalrepresentations of value issued bydevelopers and denominated in their own
unit of account. They can be obtained,stored, accessed and transacted electronicallyas long as the transacting parties agree to usethem. Examples include airline miles,cryptocurrencies such as Bitcoin and centralbank digital currencies such as DXCD.
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Eastern Caribbean Central BankEastern Caribbean Central Bank
1. Issuance of a high security digital EC currency which embraces both the
registered-based and value-based models; is interoperable and wallet
agnostic; will operate alongside physical EC currency and have near
instantaneous, real time processing, with legal settlement finality;
2. Payments and Transfers: a real time retail payment system using digital
EC currency that can be initiated through digital wallets via multiple
channels: smart phones, tablets, and PCs); and
3. KYC & AML/CFT utilities as part of the digital payments system
architecture. The goal is to assess blockchain's potential to deliver greater
transparency, faster access to information and real-time regulatory
reporting.Transforming The ECCU Together6/14/2019
FinTech Pilot Components
FINTECH INNOVATION: THE CASE OF THE ECCB
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Eastern Caribbean Central Bank
MULTIPLE CHANNELS
Eastern Caribbean Central Bank
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Bottom Line : A Balanced Approach is Required
FINTECH : OPPORTUNITIES vs RISKS
Reckless Feckless
RISKS OPPORTUNITIES
Eastern Caribbean Central Bank
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• AML/CFT
• Inadequate legal and regulatory frameworks
• Reputational
• Cybersecurity/resilience
• Data protection and privacy
• Financial stability
• Consumer abuse
CARIBBEAN FINTECH ECOSYSTEM: SOME KEY RISKS
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Eastern Caribbean Central Bank
6/14/2019 Transforming The ECCU Together
THANK YOU
- Eastern Caribbean Central Bank
P O Box 89, Basseterre, St Kitts and Nevis
(: (869) 465-2537 7: (869) 465-9562
*: [email protected] :: www.eccb-centralbank.org
www.facebook.com/ECCBConnects v ECCB Connects – YouTube
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Eastern Caribbean Central BankEastern Caribbean Central Bank
A cryptocurrency is a privately issued
digital medium of exchange that uses
encryption to secure the processes
involved in generating units and
conducting transactions.
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Cryptocurrency – What is that?
Eastern Caribbean Central BankEastern Caribbean Central Bank
Cryptocurrencies are distinct from fiat digital
currencies as they are not backed by any
sovereign/central bank and are not legal tender.
While cryptocurrencies can serve as a medium of exchange andtransfer of value between parties, their price volatility makes themunsuitable as a store of value and a unit of account. Hence thedebate as to whether they are a currency, commodity or security(crypto-assets).
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Eastern Caribbean Central BankEastern Caribbean Central Bank
Where one stands on cryptocurrencies
has a lot to do with where one sits.
There are mixed views among politicians, lawenforcement, bankers, regulators, fintech firmsand consumers.
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Eastern Caribbean Central BankEastern Caribbean Central Bank
Top Four Cryptocurrencies by Market Capitalisation (Oct 2018)
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According to https://coinmarketcap.com, as at December 04, 2018, there were 2,065commercial cryptocurrencies at a total market capitalization of US$128.5 billion downfrom US$202.7 billion in August 2018 and $616 billion in January 2018.
Eastern Caribbean Central BankEastern Caribbean Central Bank
https://www.cryptovibes.com/entertainment/growth-of-cryptocurrency-adoption-in-number-of-venues-every-year-since-
2013/
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2018 August: Number of venues accepting cryptocurrencies2014 January: Number of venues accepting cryptocurrencies
Eastern Caribbean Central Bank
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Recent Regulatory Efforts in the ECCU
• Issuance of joint advisory to
consumers of Fintech services such as
cryptocurrencies and ICOs
• Establishment of a Fintech Working
Group among regulators (ECCB,
ECSRC and non-bank regulators)14
Eastern Caribbean Central Bank
6/14/2019 Transforming The ECCU Together
Recent Regulatory Efforts in the ECCU
• Agreement among regulators to adopt a regional
approach to review and jointly develop an
appropriate framework for Fintech regulation and
supervision
• Recommendation to the Monetary Council that
there be a moratorium on approvals of certain
services pending legislative and regulatory review
and the introduction of revamped framework15
Eastern Caribbean Central Bank
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Looking Forward
• International collaboration and cooperation
• More cross-border sandboxes
• Harmonised legal framework for FinTech
development in CARICOM?
• Revamped regulatory architecture
• Caribbean Data Protection Regulation (CDPR)?
• More financial literacy
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